Overall combined tax liability


Problem: Mary (Who is single with no dependants and who does not itemize) owns 100% of Beezer Tweezer Co, which is organized as a C-Corporation. Beezer Tweezer has $400,000 of taxable income in 2011 and Mary has $34,500 of outside taxable income before any wage compensation from Beezer Tweezer. Assuming reasonable compensation for Mary's services to Beezer Tweezer would fall in the range of $150,000 to $250,000, which of the following wage distribution amounts to Mary would result in the lowest overall combined tax liability (For Mary and Beezer Tweezer)?

A) $150,000

B) $200,000

C) $250,000

D) Taking no wages from Beezer Tweezer.

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Accounting Basics: Overall combined tax liability
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